Beyond the fact that he does not believe price-to-tangible-book-value should be used as a core performance metric for bank shares, Sam Theodore says many investors paint the European banking sector with a broad brush, skipping the often-significant differences in quality and outlook between various banks or national banking systems and anchoring their views in the performance of the sector’s negative outliers across the years.

Investors are looking for growth indicators to boost bank valuations but in a mature industry like banking, growth can come attached to higher risks.

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